Microsoft's Trojan Horse To Undermine Android

What is Microsoft up to in this new mobile focused world? It's a question that has vexed many. As CEO Satya Nadella's strategy becomes clear, the mix of Windows 10 as the base operating system and the proliferation of free applications that tie into Microsoft's cloud is becoming more potent each day.

According to reports from the Wall Street Journal (and others), Microsoft is a minority partner in the latest funding round of Cyanogen (the company behind the custom Android ROM that is CyanogenMod). The round is believed to be for $70 million in total, valuing the company in "the high hundreds of millions of dollars".

What is Microsoft playing at here?

I seriously doubt that Microsoft is in it to make a profit. There are far better ways of investing its money if it wants a financial return. So where is the value in Microsoft in becoming involved with Cyanogen?

Let's start with the easiest one. While Cyanogen isn't exactly the enemy of Google (it still relies heavily on the Android Open Source Project as well as the goodwill of Google and the other manufacturers to allow devices to have the ROM installed easily and smoothly), the old adage of 'the enemy of my enemy is my friend' should apply. Anything Microsoft can do to destabilise Google and force it to expend more effort on areas where Microsoft is fighting Mountain View is a strategic win, no matter how small it is.

As Kelly points out, Android's latest update has not been smooth sailing, and manufacturers will not be comfortable being beholden to a single company for their mobile operating systems. This is one area where Cyanogen can capitalise on, as a replacement operating system with lots of compatibility. Naturally this replacement would be outside of Google's direct sphere of influence, which weakens Google and provides Microsoft with an opportunity.

Microsoft is looking at opportunities beyond the mobile operating system as a platform. Instead it is looking to leveraging any operating system so that it talks to the Microsoft cloud.

There's a rather large suite of apps in Microsoft's catalogue that can run on Android (and iOS) that will bring users into Microsoft's sphere of influence. The Outlook email client, the Office apps, OneDrive, OneNote, and more. If CyanogenMod does not have the Gmail app or the Google Office apps available out of the box because the OS is not certified for Google Play Services, then perhaps a partner could supply the software?

I'm sure Microsoft would be more than happy to load up CyanogenMod with Outlook, Office, and the rest of the app suite. I'm pretty sure it would help out with some engineering time as well if there was a need for such a thing.

Nadella's Microsoft is making a huge number of baby steps in the mobile space. Like any company it would love a big swing to hit the baseball over the Green Monster, but the truth is Redmond is grinding out a lot of small wins that move the needle just a little bit more each time.

The presumed investment in Cyanogen is another small win. For a very small outlay it can destabilise Google by strengthening a rival, it can extend its 'cloud first mobile first' strategy to another platform, and over time it will bring in more users to Microsoft's online services.

It's not a big win for Microsoft, but when you look at the moves made by Nadella not just in the mobile space, but over the whole breadth of the company's portfolio, Microsoft is raking up a lot of very small wins in every area. And when those are cashed in, they are going to add up to a lot of win.